N.Y. Banking Law § 618: Liquidation and conservation of assets; compromising debts and claims; deposit of moneys collected; preference; superintendent, as liquid...

§ 618. Liquidation and conservation of assets; compromising debts and

claims; deposit of moneys collected; preference; superintendent, as

liquidator, authorized to borrow on and pledge assets of banks. 1. (a)

The superintendent is authorized, upon taking possession of any banking

organization, to liquidate the affairs thereof and to do all acts and to

make such expenditures as in his or her judgment are necessary to

conserve its assets and business. The superintendent shall proceed to

collect the debts due. The superintendent may, upon an order of the

supreme court (unless such order is not required pursuant to the

provisions of paragraph (b), (c) or (d) of this subdivision), (i) sell,

assign, compromise, or otherwise dispose of all bad or doubtful debts

held by such banking organization, (ii) compromise claims against such

banking organization, other than deposit claims, and (iii) sell or

otherwise dispose of all or any of the real and personal property of

such banking organization wherever situated. In case any of the real

property so sold is located in a county in this state other than a

county in which the application to the court for leave to sell is made,

the superintendent shall cause a certified copy of such order to be

filed in the office of the clerk of the county in which such real

property is located.

(b) The superintendent may sell, assign, compromise or otherwise

dispose of any bad or doubtful debt held by such banking organization

the value of which does not exceed fifty thousand dollars upon such

terms as he or she may deem for the best interests of such banking

organization without obtaining the approval of the court. For purposes

of this paragraph, the value of any such bad or doubtful debt shall be

the current value thereof as determined by the superintendent in good

faith.

(c) The superintendent may, when the amount proposed to be paid by the

superintendent in compromise does not exceed fifty thousand dollars,

compromise any claim against such banking organization, other than any

deposit claim, upon such terms as he or she may deem for the best

interests of such banking organization without obtaining the approval of

the court.

(d) The superintendent may sell or otherwise dispose of any personal

property of such banking organization (other than bad or doubtful debts

subject to the provisions of paragraph (b) of this subdivision) the

value of which does not exceed fifty thousand dollars upon such terms as

he or she may deem for the best interests of such banking organization

without obtaining the approval of the court. For purposes of this

paragraph, the value of any such personal property of such banking

organization shall be (i) in the case of any single class of a security,

or any commodity, or other property or claim that has a readily

ascertainable market value, such market value, and (ii) in any other

case, the current value thereof as determined by the superintendent in

good faith.

2. The moneys collected by the superintendent shall be: (a) Deposited

on demand, time or otherwise in one or more banks, savings banks or

trust companies and, in case of the insolvency or voluntary or

involuntary liquidation of the depositary, such deposits shall be

entitled to priority of payment on an equality with any other priority

given by this chapter;

(b) Deposited on demand, time or otherwise in one or more national

banks with its principal office located in this state and with total

assets exceeding five billion dollars; or

(c) Invested in obligations of the United States, or those for which

the full faith and credit of the United States is pledged to provide for

the payment of interest and principal.

3. Upon an order of the supreme court in and for the county in which

the principal office of such banking organization is located, the

superintendent is authorized to borrow money and to execute, acknowledge

and deliver notes or other evidences of indebtedness therefor and to

secure the repayment thereof by the mortgage, pledge, assignment in

trust or hypothecation of any or all of the property whether real,

personal or mixed of such banking organization. Money may be so borrowed

for any one or more of the following purposes:

(a) Facilitating liquidation;

(b) Protecting or preserving the assets in his possession;

(c) Declaring and paying dividends to depositors and other creditors;

(d) Providing for the expenses of administration and liquidation;

(e) Aiding in the reopening or reorganization of such banking

organization;

(f) Aiding in the merger or consolidation of any one or more of such

banking organizations which are corporations;

(g) Aiding in the sale of all of the assets of any such banking

organization.

The superintendent with the aforesaid order of the supreme court shall

have power to take any and all other action necessary and proper to

consummate any such loans and to provide for the repayment thereof.

The superintendent shall be under no obligation personally or in his

official capacity to repay any loan made pursuant to this subdivision.

The obligation for the repayment of any such loan shall be solely the

obligation of the banking organization receiving the benefit of such

loan.